Administrative approval given for eastern refinery expansion project
The government has issued administrative approval for the project titled 'Modernisation and Expansion of Eastern Refinery Limited (ERL)', aimed at increasing the refining capacity of Eastern Refinery PLC (ERPLC)—an enterprise of Bangladesh Petroleum Corporation (BPC) under the Energy and Mineral Resources Division—to strengthen the country's energy security.
The project received approval at an Ecnec meeting held on 23 December 2025, while the administrative approval was issued on 10 February 2026, according to the project brief.
The implementation period has been set from 1 December 2025 to 30 November 2030.
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The total approved cost is Tk31,000.57 crore, of which Tk18,566.7372 crore will come from GoB financing and Tk12,433.8328 crore from BPC's own funds, reflecting a 60:40 financing structure.
Of the total allocation, Tk3,033.4838 crore has been earmarked as revenue expenditure, and Tk25,617.69 crore as capital expenditure.
Rationale
Bangladesh's current demand for refined fuel stands at approximately seven million metric tonnes, of which 1.5 million metric tonnes of crude oil is refined through ERPLC, the country's only refinery, established in 1968 at North Patenga in Chattogram.
With limited domestic refining capacity, the remaining 5.5 million metric tonnes of refined petroleum products must be imported at higher costs, the brief stated, adding that constrained capacity also limits the ability to import crude oil when global prices are favourable and to build reserves—placing pressure on foreign exchange and exposing the local market to price shocks.
The project aims to establish refining capacity for three million metric tonnes of crude oil annually, which, once implemented, is expected to meet 45–50% of national demand for petroleum products, reduce import dependence, and improve energy security, it added.
The brief noted that the project's feasibility study has already been completed, while the FEED (Front End Engineering Design) was prepared by Technip, France. The project's payback period has been estimated at five years.
The project also targets the production of Euro-5 standard petroleum products with sulphur content below 10 ppm, and includes crude oil blending flexibility, which the brief stated could help reduce import costs by around $18–$19 per unit of crude oil imports. It is also expected to create new employment opportunities.
The brief noted that successful implementation of the project would mark a new milestone for Bangladesh's energy sector and support the national economy over the long term.
